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Video games are still in play despite some closures

Transition continued in the video game industry in 2012. While independent and small developers proliferated, several big name studios were shuttered during the year leaving many programmers and designers

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Video games are still in play despite some closures

Mike Snider, USA TODAY
10:52 p.m. EST January 8, 2013

During a year of transition in the video game industry, beloved franchises continued to prosper while some studios were shuttered or had layoffs. Nintendo's Wii U, out in November, marks the next generation of consoles.

New video game system, the Nintendo Wii U, released in November, has a wireless motion-sensitive tablet controller. It also uses older Wii remotes.(Photo: Nintendo)

Story Highlights

Transition continued in the video game industry in 2012. While independent and small developers proliferated, several big name studios were shuttered during the year leaving many programmers and designers jobless.

The most attention-grabbing closure was that of 38 Studios, a studio started by ex-major league pitcher Curt Schilling, with the help of artist Todd McFarlane, author R.A. Salvatore and game creator Ken Rolston. After the studio's first game, Kingdoms of Amalur: Reckoning, released in February, fared poorly, 38 Studios shuttered and laid off its entire staff in May, filing bankruptcy the next month.

More recently, publisher THQ filed for bankruptcy, although it has a buyer and plans to continue development on games include a Saints Row sequel.

Meanwhile, sales of traditional video games played on console systems connected to TVs and dedicated handheld game systems continued a slight decline. Still, overall spending on video games -- including mobile, digital, social and console hardware and software -- is expected to top $25 billion, analysts estimate, surpassing 2011's $24.8 billion.

More Americans took up playing games on mobile devices such as tablets and smartphones, while some of the hard-core players who play on console game systems dropped out. Overall, about two-thirds of Americans -- 211.5 million -- play video games, according to market tracking firm The NPD Group. That's 5% fewer than in 2011, but far more than a decade ago, when about 145 million played games regularly.

Analysts expect a rebound in video game sales as early as 2013 with the arrival of the next generation of home systems. To kick off the holiday season, Nintendo released its new Wii U system ($300 to $350) with high-definition graphics. Demand for the Wii U, which makes use of older Wii remotes and an innovative wireless, motion-sensitive tablet controller, is expected to outstrip supply into spring 2013. Next year, Microsoft and Sony are expect to announce, if not launch, new consoles.

Master Chief, the main character of Microsoft's video game 'Halo 4'.(Photo: Microsoft)

Transition aside, beloved franchises such as Call of Duty and Halo can still be counted on for big sales. Call of Duty: Black Ops II, released in November, became the fastest game in the history of the series to top the $1 billion mark. Also in November, Microsoft relaunched its popular Xbox franchise with Halo 4, racking up more than $220 million in the first 24 hours.

For an industry in flux, there are other good signs. The last time the industry began the move to new console systems, in 2005, retail video game sales were half that of today, says NPD analyst Liam Callahan. "This really demonstrates the (the industry's) long-term health," he says.